According to CoinDesk, the tokenization of real-world assets has been surging alongside the strong rally in cryptocurrency prices. This development highlights the potential benefits of tokenizing assets and reframes the way we view the digital assets ecosystem. Instead of focusing on digital assets as an asset class, it is important to view networks like Bitcoin, Ethereum, and Solana as digital infrastructure for building and commercializing services, including asset tokenization.
Asset tokenization refers to using distributed networks and their databases to register interactions between parties. A prominent example is the emergence of stablecoins, mostly tokenized U.S. dollars. The outstanding supply of these tokens currently stands at approximately $150 billion, up from almost nothing five years ago. With the established product-market fit, the question arises: If one can issue U.S. dollar tokens, why not issue other currencies or assets on-chain?
Tokenized U.S. Treasuries, for instance, have grown to around $750 million in just two years. These tokenized T-bills offer advantages over traditional stablecoins, such as generating and delivering a yield. Tokenized assets also provide the potential for 24/7 exchange, faster settlement time (T+0), and greater accessibility. Examples like tokenized gold further demonstrate how digital asset networks serve as the underlying digital infrastructure for distributing financial services. This perspective allows us to consider what other value-add services could be delivered via digital asset infrastructure, rather than measuring the success of these networks by the price of their native cryptocurrency.
